ICD-10 Revenue Retention: Is There a Magic Wand?

Every healthcare organization in the country has the same question: What will ICD-10’s impact really be? And every time I speak with 3M clients, I know they are hoping to hear about a secret magic wand that will seamlessly handle ICD-10. Voila!

Does this magic wand exist? I hate to break it to you but…no. But don’t despair. There are tools and methods to take the sting away. Beyond the initial conversions, much consternation is focused on reimbursement, as in:

How will ICD-10 affect my revenue?

How do we measure the impact?

How much are we going to lose in 2014 because of ICD-10?

Which departments are affected most?

The basic method for measuring the impact is to look at your DRGs grouped with ICD-9 codes, estimate what DRGs will look like in ICD-10, and then compare. Sounds simple. Could this be the magic wand?

Not so fast. To start with, there are thousands of shifts that occur between ICD-9 and ICD-10 to review. Not so simple. So where do you start?

Some of the DRGs will shift more than others. If DRG 229 is going to change -$1,000 and DRG 230 is going to change by -$90,000, which DRG would you want to review? Most people would say DRG 230.

Okay, so now you know where your biggest pain points are. What’s next? Do you need to research all claims that are affected? Do you need to review charts? Well, the answers depend on how much time you want to spend on the review and what experts you have available to look at them. Most of the people I have encountered have little time to do this research and even less time from their clinical experts. But if you did, you could identify which DRGs cannot be fixed, which ones can be fixed and which ICD-10 codes to use to avoid those shifts.

3M’s experts did just that. They reviewed the shifts that occur and identified the percentage of time a shift occurs and whether the shift is avoidable or not. Unavoidable shifts occur when there is no combination of ICD-10 codes you can use to get you back to the original DRG. It’s a bit pointless to spend time on these.

Conveniently, avoidable shifts are where the opportunity to improve reimbursement exists. There are more than 1,600 avoidable shifts in ICD-10. For avoidable DRGs, 3M identified the ICD-10 codes that caused the shift, and the ICD-10 codes can be used to avoid the shifts. Armed with this information, you can be certain that future claims will not shift if they do not have to. And at the end of the day, that is what you really want.

So let’s look at an example.

There is a DRG shift that occurs for DRG 381 based on ICD-10 wherein 4.6 percent of the time DRG 381 (Complicated Peptic Ulcer with CC) will shift to DRG 384 (Uncomplicated peptic ulcer without MCC). The weight for DRG 381 is 1.113 vs. 0.8365 for DRG 384 – a decrease of 0.277 per claim. With a base rate of $5,200, that’s a difference of $1,438 per claim. If there are 1,000 claims for DRG 381 and 4.6 percent of them shift, then you are looking at 46 claims or a loss of $66,000 for this one shift.

This is avoidable. The shift occurs because the ICD-10 code that is used 4.6 percent of the time is K25.3 Acute gastric ulcer without hemorrhage or perforation. There are two codes (K31.1 Adult hypertrophic pyloric stenosis and K31.5 Obstruction of duodenum) in ICD-10 that, when supported by the patient diagnosis and documentation, can be used. When either of these two codes is used, the claim groups to DRG 381. Voila! One DRG shift down.

Maybe it’s not a magic wand, but there are ways available to make your ICD-10 life a little easier.